Recent Articles

Ten years ago, just before the onset of the financial crisis, I wrote an article for an academic journal proposing a new agency that would regulate financial products and protect American consumers. I set my expectations low: This idea would go nowhere. But after the financial system imploded, there was sudden interest in my idea from that dusty academic journal. I started to talk to groups about building a consumer agency, and one after another came on board: unions, AARP, Consumers Union. The giant financial institutions were dead set against it—and they spent more than $1 million a day lobbying against the new agency and tougher financial rules. It was David-versus-Goliath all the way, but in 2010 President Obama signed the Consumer Financial Protection Bureau (CFPB) into law. As I was setting up this new agency, I asked Rich Cordray to help. He agreed to come to Washington just temporarily to build the CFPB’s new enforcement team—and he ended up staying for seven...

The Senate is in the midst of a fierce battle over the future of the consumer-credit market. If you aren't watching, you should be. While President Barack Obama and reform advocates are pushing for the sort of meaningful rules that would fix a badly broken credit market, Wall Street is pouring millions of dollars into blocking any changes that could force the industry to change how it does business. At the center of this fight is a proposal for a new consumer agency with the authority to write meaningful rules and with the teeth to enforce those rules. Senate Banking Committee Chair Chris Dodd's latest proposal, which the committee recently reported to the full Senate, would house the watchdog in the Federal Reserve System. Although the agency would not be stand-alone, as it was in the version Barney Frank led the House to approve, the Senate bill still gives it substantial authority. Sen. Jack Reed of Rhode Island is pushing for a truly independent agency, as the president proposed,...

Remember all those speeches you gave filled with statistics and stories about the middle-class squeeze? You spoke the truth. Wages really are stagnant, and we really are struggling to buy the basics. The core of a middle-class life--a home, health insurance, a good education for our children, the things our parents could take for granted--is rapidly moving out of reach. Debt, defaults, and foreclosures for a typical middle-class family have soared in the past four years. Every 15 seconds, one of our middle-class neighbors collapses into bankruptcy. You already know this. Your opponent called you a pessimist for talking about it--and watched nervously when people nodded in agreement as you spoke. We elected you because we believed, “Here's a guy who gets it.” Now, turn your speeches into reality. But before you launch policy proposals, speak to us about our values. Talk about how you will help us dream again for ourselves and our children. Here's what we want to hear:...

Families with children are under assault. The assault is quiet, attracting few headlines, no congressional investigations, no knowing conversations at the office or at parties. The assault is stealthy, but the effects are profound. This year, more families with children will file for bankruptcy than divorce. Motherhood is now the single best predictor that a woman will end up in financial collapse. And, contrary to every popular assumption, the parents who find themselves in the bankruptcy courts are not chronically poor. Rather, when measured by criteria such as occupation, college education, and homeownership, more than 90 percent of the families at the end of their financial ropes are solidly middle class. The lines at the bankruptcy courts are not the only signs of growing middle-class distress. A family with children is now 75 percent more likely to be late on credit-card payments than a family with no children. Home foreclosures have more than tripled in less than 25 years, and...